Democrats block SEC nominees over political money fight

Opposition from top Senate Democrats Thursday stalled two of the president’s nominees to the Securities and Exchange Commission over whether the nominees support requiring publicly-traded corporations to disclose political spending.

Nominees Lisa Fairfax, a Democrat, and Hester Peirce, a Republican, had waffled on the issue. Democratic Sens. Charles Schumer and Elizabeth Warren were among four Senate Banking Committee Democrats opposing the nominees, which led Banking Committee Chairman Richard Shelby to postpone a vote that had been set for Thursday.

Schumer said both nominees are “fence-sitting” on whether to force corporations like Koch Industries to reveal their political giving. Republicans succeeded in blocking the proposal through in last year’s catch-all spending bill.

“The SEC needs commissioners who believe in and support campaign spending transparency,” Schumer said. “I hope that both nominees will reconsider their fence-sitting on this critical issue before the vote, and make clear that they will support an SEC rule that will help root out secret money from our politics.”

The opposition from allies of President Barack Obama to Fairfax, the Democrat, was particularly unusual. Peirce, a conservative attorney, was recommended by Republicans. Shelby had planned to advance them together but demurred after Schumer, Warren and Democratic Sens. Jeff Merkeley and Robert Menendez spoke out against the nominations. Republican Tim Scott voiced opposition to the Democratic pick as well, leaving the vote in doubt.

Consumer and liberal groups, and some Democratic lawmakers, have urged the SEC in recent years to adopt a rule requiring public companies to disclose political donations. Their argument is that shareholders, as owners of a company, should know which political candidates or causes are receiving their money.

SEC Chair Mary Jo White, in questioning by lawmakers, hasn’t committed to getting the five-member commission to adopt such a rule.

Opponents have maintained that political spending isn’t the kind of relevant information that shareholders need to know about a company. Some Republican lawmakers have said that such a move by the SEC would be an abuse of regulatory power.

At their recent confirmation hearing in the Banking Committee, Fairfax and Peirce said the SEC appears to be prevented from adopting such a rule by an amendment to budget legislation. Fairfax said she would consider the various arguments on the issue if confirmed.

Their responses angered Schumer, who said he leaned against approving them despite their evident qualifications for the positions. Menendez also said he was dissatisfied with the nominees’ answers.

In a written follow-up, Fairfax evaded the question on disclosure of corporate political giving, saying she would not “prejudge any issue without the benefit of full engagement” and that she would “thoughtfully and carefully consider this issue.”